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Pssst!  This Palace is a Real Bargain

Paul Price sees a 'rare bargain' in the price of Children's Palace shares.
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Paul Price has written often about the company Children’s Place  (PLCE) - Get Children's Place, Inc. Report and its stock. He remains confident on its future.

“The Children's Place has blown analyst estimates right out of the water so far this year.” Price wrote recently on Real Money. “After losing money in fiscal 2020 due to COVID-mandated store closures PLCE's trailing 12-months' EPS now total $7.41 per share for the period ended Jul. 31, 2021. Fiscal years end on the Saturday closest to Jan. 31 of the following calendar year.”

Price noted that “There was just one prior year that PLCE posted better numbers than have already come through. The company earned $7.91 per share back in fiscal 2017. Its shares topped out at $161.60 during January of 2018 when Q4 results were still pending release.”

Meanwhile, “As of Sep. 20, 2021 consensus analyst expectations for the current year have been jacked up to $11.24 on Yahoo Finance. That would represent a stunning 42% rise from the old record.”

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Over the past two years retail has seen major turmoil. “As 2019 closed the economy seemed strong and for some retailers (such as Children’s Place) did quite well. Then 2020 struck and shut those businesses down almost entirely, if temporarily.”

Now, however, “many consumers are flush with cash saved while shops and restaurants went dark. This has created wild fluctuations in the retail sector. The result, though, has been a significantly undervalued stock.”

Before COVID, “PLCE typically commanded about 16.7-times current earnings. At present, the stock's P/E is less than half that, at just 7.5-times. A simple regression-toward-the-mean valuation could easily justify a move to $177 or so within six months.”

In summary, “Children's Place is a rare bargain with a legitimate chance at a double or better over the coming 12 - 24 months. Online sales are booming and customers are flush with ongoing monthly government checks for each child in the family.”

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